Obama drops plan to cut tax benefits on 529 savings accounts
On Tuesday, President Obama dropped his proposal to remove the ability for people to withdraw money tax-free from 529 college savings plans.
The administration said that the tax break disproportionately benefited the wealthy, with more than 70 percent of accounts held by families who make at least $200,000 annually, and wanted to redirect more money to the middle class, The Washington Post reports. The White House faced criticism from parents and lawmakers on both sides of the aisle, who said the accounts are one of the best ways for families to save for college. "The President's plan has the puzzle pieces necessary to bring the middle class back, but this particular piece didn't fit," Sen. Charles Schumer (D-NY) said.
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